Analysis by a Sydney buyer’s agent has revealed five leading-indicator suburbs set to be at the forefront of price gains during the city’s next growth cycle.
Principal and buyer’s agent at Buyers Domain, Nick Viner, said by studying the data and applying on-the-ground knowledge, he has identified locations he considers beacons of overall price rises.
“The facts are that certain fundamentals ensure some suburbs react before others when prices begin rising again,” he said.
Mr Viner said the surprise Coalition election win coupled with the recent APRA announcement on more relaxed lending guidelines had brought confidence quickly back to the market.
“Given recent developments, there’s an expectation Sydney property will rebound sooner rather than later – but it can be tough to pick exactly when for most buyers and no one has a crystal ball,” he said.
“However, by looking at those suburbs with the right fundamentals and observing historical price movements, I’ve chosen addresses where prices will most likely rise first.”
Mr Viner restricted the sample to suburbs within a 10km radius of the CBD which had seen the greatest price drops in the past year.
“Near-city suburbs are, historically, the most reactive when prices turn around,” he said.
“I then considered fundamental price-growth drivers, such as infrastructure and facilities, to choose areas likely to be among the first to see value gains.
“Knowing which suburbs to watch means you’ll be ahead of the general market upswing.”
Mr Viner’s leading-indicator suburbs are:
Located in the heart of the city on the banks of Rozelle Bay, Glebe has enviable access to lifestyle and facilities.
“Glebe ticks so many boxes, yet a property price retraction of around 17 per cent over the past year, to reflect a median of around $1.6 million, shows it’s well below its peak,” Mr Viner said.
“Glebe is a stone’s throw from Broadway, Haymarket and the rest of the CBD, and is close to the University of Sydney, UTS and RPA hospital.
“The suburb has remained popular with a cross-section of purchasers, from first home buyers to families looking to upgrade to downsizers.
“I have no doubt when real estate prices turn around, Glebe will be among the first to benefit.”
Redfern had already evolved well beyond its chequered past to become a major urban hotspot.
“It’s now seen as one of the city’s most exciting addresses, with property price rises during the boom evident of its gentrification,” Mr Viner explained.
However, a drop in property values of around 16.8 per cent to a median price of $1.39 million over the past year means the ‘boom premium’ is now priced out.
“The upside is this – new infrastructure is enhancing Redfern’s appeal,” he said. “As confidence returns to the market, it will definitely be one to watch as among the first for value increases.”
Mr Viner cited the Commonwealth Bank’s move of 10,000 staff to their new facility next to Redfern Station as one facet set to drive demand.
“In addition, Redfern Station will be upgraded as part of a $100 million project, which improves convenience for commuters,” he added.
“Another exciting move is the Central Precinct Project which is set to create a thriving transport-oriented lifestyle hub within close proximity of Redfern.”
The Lower North Shore suburb of Lane Cove, positioned just 7km from the CBD, is one of those ‘must-have’ Sydney addresses.
The suburb is an administrative hub for local council as well as being a major commercial centre for the district.
“Lane Cove saw property price falls of around 16.6 per cent over the past year with a median that now sits at approximately $1.8 million,” Mr Viner said.
He believes Lane Cove has plenty to offer confident buyers who are eager to be first back to market.
“The pressure amongst Lower North Shore families looking for good homes close to schools, shops and transport is simply too great for them to ignore Lane Cove as an option when the market turns.”
The eastern suburbs of Sydney are the very definition of blue-chip real estate, with iconic addresses dotted throughout the region, which proved highly resilient throughout the last year.
While some Eastern Suburbs saw price falls, they were among the least dramatic within 10km of the CBD.
Mr Viner said the biggest fall was in North Bondi’s median property price, which reflected a drop of around 16.4 per cent over the year.
“North Bondi’s median property price of $2.533 million is still fairly steep for the average buyer, but signs show it’ll be among the first suburbs in Sydney to move,” Mr Viner said.
“Stock and prices have tightened considerably since last year – even in recent months. Good luck now if you are looking for a house in North Bondi under $2.5 million!”
Leichardt is about 5km from the CBD and is among the more price-accessible addresses within this near-city band.
The suburb’s property prices fell by around 15.8 per cent in the last year, with a median property price of $1.28 million.
Mr Viner said it was this price point that made Leichardt an attractive option for those re-entering the market after recent falls.
“Stock levels have tightened up considerably since last year, particularly in the ultra-competitive sub-$1.5 million price bracket, which is a popular budget amongst first home buyers, small families and downsizers,” he said.
Mr Viner also noted, somewhat ironically, the stop/start WestConnex project had presented an opportunity for today’s buyers to profit.
“The uncertainty of WestConnex may have had an impact upon some properties affected by tunnels and other construction, but as the project nears completion, this is likely to be less of a factor in the future and could, in fact, boost values.”